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FTC Alleges T-Mobile Made “Hundreds of Millions” From Bogus SMS Charges

Tue, 07/01/2014 - 3:17pm
Ben Munson

The Federal Trade Commission today filed a complaint against T-Mobile alleging the carrier made “hundreds of millions” from fraudulent “premium” text message services.

T-Mobile is accused of “cramming,” a practice of placing third-party services on a consumers bill and collecting a portion of the charge.

The FTC claims that T-Mobile took in 35 to 45 percent of the revenue from SMS services like “flirting tips, horoscope information or celebrity gossip” that typically charges $10 monthly. The Commission also alleges that T-Mobile continued collecting money off these charges even after it had reason to believe the charges were fraudulent.

“It’s wrong for a company like T-Mobile to profit from scams against its customers when there were clear warning signs the charges it was imposing were fraudulent,” FTC Chairwoman Edith Ramirez said in a statement. “The FTC’s goal is to ensure that T-Mobile repays all its customers for these crammed charges.”

The complaint further asserts that T-Mobile claimed, without any proof, that consumers had authorized the services.

The FTC is seeking a court order to stop the alleged cramming and obtain “refunds for consumers and disgorgement of T-Mobile’s ill-gotten gains.”

We’ve reached out to T-Mobile for comment and will update the story when they issue a statement.

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